The Cost of Independence

The Cost of emancipation concerns and fears of frugal stage phone linemen Martina Macakova What assembly line trineership in Scotland unfeignedly seek to hear is a irresponsible discussion on the future for Scotland and what composition they can extend in shaping it, not a re-run of old arguments ab protrude potential damage to the economy of inherent change. introduction Ewan Hunter, Director of HunterSearch This essay deals with a discussion about stinting emancipation through the sight of local commerce leaders.Its aim is to analyze their opinion on Scottish tendencies towards license, if and to what extent could they influence the results of upcoming referendum and whether Scotlands business companies could play a role of an ally of the UK g overnment. It provides the analysis of the on-going situation, particularly in the light of recent notwithstandingts, as the First Minister Alex Salmond, leader of the Scottish National Party (SNP), in the beginning of January announced that the referendum on Scottish Independence should be held in autumn 2014.In this essay I will attempt to come with a prediction of the possible future development of the opinion of Scottish leading business companies. For that purpose I have examined mostly newspaper articles, opinion polls, governingal documents and existence speeches given by the local business translators. As a secondary source and the introduction to the bailiwick of Scottish Independence I found very valuable a publication written by Jo Eric Murkens, Peter Jones and Michael Keating Scottish Independence A Practical Guide. A division of state into deuce sovereign parts would be very complicated and long-term process.It is a process fraught with problems and controversy. Whether it is a rive up of marriage or of nations, the major bone of contemption is always the selfsame(prenominal) who pushs what. The division of Czechoslovakia in novel 1992 and 1993 could serve as a precedent for similar action, anyhow the situation of the Union and peeer Czechoslovakia differs. In Scotlands case, controversial may be especially the separation of state debt and North Sea fossil oil reserves the future of military bases on the island of Clyde, home of British nuclear missiles question of the membership in the European Union and currency issue.Despite the fact that the license is primarily a question of national individuality and governmental change, we cannot forget that sparing prosperity is prerequisite for well-functioning state. Its Scotlands oil If in that location was an independent Scotland would it be economic failure or success? It office sound a paradoxical thing to say only when the core issue related to the economics cannot be really answered correctly. According to Peter Jones, the starting come out for dealing with the economics of independence lacks to be existing Scotland.And current Scotland is a Scotland that operates within the coupled King dom of Great Britain and Northern Ireland. It is explicit that public spending would demand greater income as two new types of costs would affect the public sector. First of all, there ar costs incurred by the need to add on functions (such as defense) and those incurred by the need to disentangle the Scottish element of such UK-wide bodies (for voice Inland Revenue). Undoubtedly, Scottish government can count on the benefits from obtaining control of offshore oil and assail resources.The representatives of SNP repeatedly assert the Scotland would be among the worlds richest countries. Additional GDP acquired from the profit made by oil companies offshore is nearthing what we can more or less rely on. Before his re-election campaign Alex Salmond grasped the perspective to dust off SNPs old slogan Its Scotlands Oil. It was a hopeful move. As the election results showed the resurrecting claim that all North Sea oil as well as its revenues belongs solely to Scotland, was what Scottish voters wanted to hear. Oil and gas resources themselves dont guarantee long unyielding wealth.Douglas Fraser, Scotland Business and Economy Editor at BBC, expressed his concerns that there is an elephant in the room that needs to be discussed. The price of oil is volatile and volatile price of oil means volatile income. Moreover, the trend is distinctly for the volume of oil and gas production to fall, though that is partly offset by higher modal(a) prices, higher appraise rates, and so buoyant revenues. Yet, an economy of an independent Scotland would be dependent on sum of variable factors whose precise effects cannot be forecast. Among those unpredictable factors is a haracter of the negotiations that can either minimaze or expand the degree of un proof. The level of uncertainty affects business confidence and investment and it is something that has been often mentioned by the Scottish business representatives while comenting on the question of independence. As P eter Jones points out, another parameter which stands completely out of political control is whether the general economic environment is good or bad. In adverse ages, business would be passing nervous about independence as would the international markets. In this situation the price of independence could be quite high.The aim of idependence is to change the monetary, fiscal and regulatory regime which is currently the same as the in rest of the UK. The Scottish voters ar likely to approve a different kind of a devolution model, which would provide more powers for the Scottish Parliament, particularly in terms of tax-varying powers and fiscal policy in general. The conclusions of a poll conducted by Ipsos MORI in November 2009 are that 66 per cent of the respondents are in choose of the Scottish Parliament having increased its powers, whether in terms of throw out devolution or fully independence.The attempts to get the public involved and the referendum itself should be appreci ated. That is the major difference in comparison with the zero involvement of Czechoslovak citizens when the disintegration of Czechoslovakia was distinguishable about. More explanation about the proposed concept of independence provides the Scotlands Future Draft Referendum (Scotland) schnozzle Consultation Paper. Independence in terms of the proposal would mean that the Scottish Parliament and authorities would be responsible for all areas of legislation, including foreign affairs, defence and gross, and the Queen would remain the head of the state.The current political and monetary sexual union would be replaced by a social and monarchical union. Although the monetary union would no longer exist, Scotland would keep operating within the Sterling system until it would be decided in a referendum that Euro would be accepted. Although, SNP leaders would most likely to follow the peacefull process of velvet divorce of Czechs and Slovaks, it doesnt seem that monetary question wo uld be the case as the issue of currency remains unclear.While the Czechs and Slovaks at one time began to create their own currency, the Scots first considered adopting the euro. In connection with run lowing Eurozone crisis First Minister Alex Salmond changed his rhetorics and forthwith claims that they would keep the pound. The SNP proposes sticking with superlative until Scots choose, by referendum, to unification the euro. According to Douglas Fraser from BBC, his problem, in explaining this policy, is that remaining with sterling leaves the treasury and Bank of England in London to set Scotlands monetary policy, while having no influence over it.THE business of (un)certainty Until recent time, there has been almost deafening silence on whether Scotland should become an independent farming from local business companies. We could argue whether the reason for the lies in potencional risk of going out on a limb, as Douglas Fraser suggest in one of his articles, or if it mor e simple than that and the business leaders are just too occupied with the current financial crisis. Fraser writes in his article titled Holyroods challenge to business Iain McMillan seeks to balance support of some policy with pungent criticism.On balance, he says members say the potential advantages of devolved business taxation are outweighed by the likely costs. But it is the criticism that gets McMillan noticed, and nationalist voices can increasingly be perceive questioning the legitimacy of the CBI as a voice for business in Scotland. The Federation of Small Businesses, the Scottish Council Development and Industry and Scottish Chambers of Commerce are careful to sit on the fence, plausibly because their memberships are split on constitutional questions.It is also because the implications of the Scotland Bill, or of increased devolution of taxation powers, are so unclear. Representing the banks, insurers and asset managers, Scottish Financial Enterprise wants to get along if the tax base could be changed as well as the rate. Would there be additional complexity, and at what costs to business? How volatile would tax receipts be, and can a value be placed on the value of being part of a larger, more diverse tax base, as at present?Even asking questions, which might be seen as hostile or at least awkward, is risky territory for business. SFE Chairman, Mark Tennant, expressed his concernes regarding independence at the end of his speech at the annual dinner in December last course Our approach, however, should be empirical and focused on facts and the removal of uncertainties. Our role is to identify the questions that need to be answered and ensure that the electorate receives an answer before they vote. Also Danny Alexander who is MP for Inverness, Nairn, Badenoch and Strathspey, and Chief Secretary to he Treasury shares opinion that uncertainty hurts economy and remarks that if the Eurozone has taught us anything, it is that monetary union betwee n fiscally independent states is an extremely difficult challenge. He argues that Scottish Government says it would continue to operate within the sterling currency area, but doesnt say how. His message to the Scottish leader think carefully before sacrificing stability through independence. Regarding to the timing of the referendum, David Lonsdale, assistant director of Glasgow-based CBI Scotland, said in an interview. We want it sooner rather than later. From the chin wags above is obvious that umbrella organizations associating Scottish business companies such as CBI and SFE are taking the side of UK government claiming that referendum should be held as soon as possible and at the same time expressing serious concers about the benefits of clownishs independence. For a long time it seemed that the individual business leaders adopted an ostrich scheme because few Scottish business leaders have spoken publicly about constitutional change.However, year 2012 brought a turnover a s some one of managers decided to stir up the still water a bit. Martin Gilbert, chief executive officer of Aberdeen Asset Management Plc, Scotlands largest fund manager, spoke out Whether it is independence or not is a matter for the voters to decide. I would like to see all the figures so you can make an informed judgment. At the moment you dont know what the true figures are. Boyd Tunnock, representative of the Scottish maker of Caramel Wafers and Snowballs, commented in e-mail statement Scotland and Scottish business needs certainty and clarity.We need the independence referendum to be held as soon as is reasonable so that investors know where they stand. To some extent the uncertainty was diminished by the Salmonds clear statement about the referendum date. One of awkwards leading businessmen Jim McColl welcomed the Scottish Governments upcoming consultation on Scotlands constitutional future by saying Many of us in business are confident(p) a prosperous future for this cou ntry depends on more powers for the parliament. Article Business leaders join in referendum pass published on Tuesday this week shows slighty more positive attitudes towards the constitutional change and wickedness versa express criticism towards the representatives of CBI, SFE and Westminster politicians Members of Scotlands business community have refuted questions over the timing of an independence referendum and called for an end to scaremongering and a proper discussion on the merits of taking all decisions about Scotland within Scotland. There is little warm picture that the referendum or the prospect of Scottish independence is damaging the Scottish economy.Business leaders have in the main expressed either a neutral or a positive attitude towards constitutional change in Scotland. The author of the article supports his argument by quoting some of the local business leaders Recently David Watt, Executive Director of the Institute of Directors in Scotland was asked by th e BBCs Huw Edwards whether he was concerned by the prospect of a Scottish referendum in autumn 2014, as opposed to the Westminster governments preference for a vote as soon as possible.Mr Watt said that he thought that the date of the referendum made no difference. Having a timetable leading up to the second half of 2014 allowed businesses to plan. Similar opinion has Dan Macdonald of Macdonald Estates The fact is the biggest decision in triplet centuries lies before us and we owe it to our children, and those who succeeded us to burgeon forth whatever time is required to discuss the form and detail of what will be our New Scotland. In order to do that London politicians need to bankrupt peddling scare stories and focus on a meaningful debate about Scotlands future. On the same is also owner of The Residence Glasgow, Sarah Jane Walls who feels that there should be less negative scaremongering and more positive debate about Scotlands future, continuing that she is excited about t he possibilities for Scotland as independent country. According to the survey processed for the Business Insider that covered opinions of business on Scotlands independence, the majority of businesses (67 per cent) think independence for Scotland would not have a positive effect on their business with only five per cent saying it would be positive and 17 per cent unsure.Questionnaires were sent to companies listed in Insiders TOP500, SME300 and SPRINT100 lists. One of the CEO with this opinion poll further commented Achieving Scottish independence will not, in itself, prove to be the panacea for the challenges being faced. After all, there is little or no evidence to show any change will be positive. Therefore, to armed service improve our economy appoint independent Scottish and international business experts to properly advise our inexperient politicians to tackle the real, everyday issues of business rather than spend unnecessary time debating the future of Scotland without ny clear evidence to support how, and indeed why, the status quo should be changed. The contrary opinion expressed David Watt, executive director in Scotland of the Institute of Directors, by saying that none of the institutes 1600 members have expressed any concern as to a delay in a referendum vote. A spokesperson for UK Oil & Gas said although the body has no member consensus on the issue of independence, none of its members has raised the issue as a specific concern. resultant The aim of this essay was to deal with the issue of Scotlands independence from the perspective of local business leaders.By analyzing especially newspapers articles that are dealing with the topic I learned that there are three possible attitudes towards Scotland graceful independent. One side represented mostly by CBI and SFE publicly claims that independence vote could harm Scottish economy. The opposite camp, which is primarily constituted of blue-chip companies, suggests the contrary. These positively thinking business leaders are denying comments that a delay on independence and the independence in general will destabilise the Scottish economy. The tierce group is classified by being neutral or by refusing to comment on the independence question.It is logical that CBI and SFE are speaking less in favour of independence and the later date of referendum as they have closer relations with the government in London than the individual organization do. In my opinion, even the business leaders that proclamated their support for independence cause and Salmons referendum timing feel at least some doubts. Also I think that a lot of the is actually tired of the independence talk and they would rather here from both UKs and Scottish Government some warranties in the time of economic crisis and that the politicians will support their efforts to kick-start the ailing economy.From the side of the local business leaders there is understandable demand for answers on number of important questi on. That brings us back to the introduction of the essay where I comment that most of the issues regarding the economic situation of independent Scotland cannot be precisely predicted. However it sounds disappointing. Many options might take place and the situation depends on various factors that Scottish Government cannot influence. We dont even know the answer to the fundamental question whether there will be an independent Scotland. UKs government is stringently against the eparation of the Union, neither the Scots itself are united on the matter and as stands out from the lines above, nor the Scottish businessmen. Still, the independence is surely more realistic than it was couple months ago. I believe that CBI and SFE could be potencial partner of the central government during the future negotiations over independence. They associate number of important companies and they could have certain influence on their members. On the other hand, there is a quite large number of compan ies, which are managed by people who decided to prove that the idiom You cant fight City Hall is a false statement.My belief also is that business could influence the negotiations, however I wouldnt say that companies could be determine the public opinion in general. Which side in end the majority of the business leaders joins will depend on numerous factors, especially on how skilfull in answering difficult questions will Scottish political representatives be. SNP with Alex Salmond in lead is trying something that no-one has ever tried before. To conclude I would say that I propably wouldnt bet on my own prediction because predicting something in terms of the economic situation of independend Scotland is like predicting the unpredictable.References Murkens, Jo E. Jones, Peter Keating, Michael. Scottish Independence A Practical Guide. Edingburgh University Press, Edinburgh, 2002. Tom Clark. If one day it really is Scotlands oil what will we do with it? The Herald Scotland, 29 Octo ber 2011. Available online http//www. heraldscotland. com/news/home-news/if-one-day-it-really-is-scotlands-oil-what-will-we-do-with-it. 15567484 (accessed on 16 January 2012). Douglas Fraser. What would happen to Scotlands economy after independence? BBC. 15 January 2012.Available online http//www. bbc. co. uk/news/business-16548644 (accessed on 16 January 2012). Douglas Fraser. Holyroods challenge to business. BBC. 30 September 2011. Available online http//www. bbc. co. uk/news/uk-scotland-scotland-politics-15122749 (accessed on 10 January 2012). Scotlands Future Draft Referendum (Scotland) Bill Consultation Paper. 15 February 2010. Available online http//www. scotland. gov. uk/Publications/2010/02/22120157/0 (accessed on 10 January 2012). Danny Alexander. Uncertainty hurts economy. Scotland on